How much will you pay?

How much extra you pay will depend on the age of your car and its CO2 emissions (unless it was registered before March 2001).

For cars first registered on or after April 1, 2017, the standard annual rate will rise by £5 to £145. Owners of zero-emission vehicles will continue to get free tax and those with hybrid cars will continue to receive a £10 discount.

For cars registered between March 1 2001 and March 31 2017, the rises are different. The least polluting cars – up to 120g/km won’t see any increase while the most polluting will be hit with a £15 rise.

First-year rates

Buyers of brand new cars are also being affected by two additional rises. The first year of a car’s tax is calculated based on its CO2 emissions, currently ranging from £0 for zero-emissions electric cars to £2,070 for the most pollution combustion engines. From April, this first-year rate is also rising.

Cars emitting 90g/km or less are unaffected while those up to 150g/km will see an extra £5 added. More polluting cars will see between £10 and £65 added to their first-year rate, meaning a car emitting more than 255g/km will cost £2,135 in its first year.

On top of that, any diesel car that does not comply with the RDE2 emissions standard – that is most of them – is automatically moved up one tax band.

Cars with a list price of more than £40,000 will also be subject to a “premium tax”, which is paid in years two to six, rise from £310 per year to £320.

Older cars

If your car was registered before March 2001 its VED is calculated by engine size. Government documents don’t mention these vehicles in the latest tables but an increase in line with RPI would mean a £5 rise for cars under 1,549cc – to £160 – and £8 for those over 1,549cc – to £263.

Exemptions

Cars more than 40 years old, those with zero emissions and any car registered between March 2001 and 2017 with emissions of less than 100g/km are all exempt from VED. However, you still have to renew your car’s tax or declare it off-road each year otherwise you could be fined.